Warning after jump in foreign investment

BRITAIN'S share of investment from abroad jumped last year, in a fresh sign that independence from the euro is not denting its competitiveness.

Inward investment leapt by 31% to the biggest number on record, according to figures from the Department for Trade and Industry.

It said there were 1,066 foreign business projects in the UK, creating 39,592 jobs - up from 25,463 jobs created by 811 investment projects in 2003.

However the Organisation for Economic Co-operation and Development warned that the UK would lose jobs to abroad.

In its Employment Outlook, it warned that up to a fifth of jobs in Western economies could 'offshored'. It said most of these jobs were in the services sector, including white-collar workers. The OECD also warned that UK unemployment would rise this year and next, from 4.7% to 5.2%.

Trade secretary Alan Johnson said: 'The UK is still viewed globally as one of the best places in the world to do business thanks to our unrivalled economic performance, emphasis on research and technology and skilled, flexible workforce.'

New EU countries from eastern Europe are putting up a fierce fight for investment but are not competing 'head-to-head' with Britain.

Services make up the largest area of investment projects, followed by manufacturing. The US accounts for the lion's share of inward investment, 43%, with 464 projects bringing 17,730 jobs.